By and large, most of us usually only think seriously about our money at a couple of times each year – Federal Budget time, and Tax time.
When the government delivers a budget, most of us ask “what’s in it for me?”
At tax time, we wonder “how much can I claim?”
This interest in our finances then tends to wane for the next 9 or 10 months of the year due to a number of reasons – apathy, being time-poor, or just believing in a long held budgeting myth. Here are some of the more common we’ve heard – we’re happy to bust them for you.
I’m not good at maths so I can’t budget
Look, it’s 2017. We entrust so many aspects of our lives to technology, so why not get online to manage our household budget? Tools like this one take the stress out of budgeting – just punch in your details and start keeping better track of your money. No degree in rocket science required.
My job is secure, so what’s the point?
Hmm, seems sound logic initially, but whenever you hear about large-scale layoffs, or small businesses going bust, do you think the unfortunate employees at these businesses thought any different? Sure, it’s easy to get lulled into a false sense of security by a regular pay check, but be honest – if you lost your job tomorrow, how long could you make ends meet?
No-one’s job is truly secure, so a good rule of thumb is to always aim to have at least three months’ worth of income put aside in emergency savings. Sound like a lot? That’s where budgeting comes in. By accounting for a small contribution to a rainy day fund each payday, you’re building a safety net without much pain in your back pocket.
Unemployment will cover me if I’m out of work
Again, a common one, but a dangerous assumption. Australia’s unemployment benefits scheme is set up to support those in true need, and actively encourages those out of work to re-enter the workforce. Also, like any large government benefits system, it’s far from perfect, and it won’t kick into action for you straight away. If you were to find yourself out of work, and then were able to secure unemployment benefits, there could be a significant waiting period during which you’d have to rely on whatever funds you could scrape together.
This is yet another example of where budgeting could come to your rescue. If you’ve been saving for a rainy day, you’ll still be able to keep the lights on, and you’ll be able to adjust your spending to accommodate your lack of regular income.
I don’t want to go without
Over time, a perception of budgeting has evolved which paints it as miserly and restrictive. While some of us will be forced to place tighter budgets on ourselves in order to reach a financial goal (saving for a deposit, holiday, etc), going without is not what budgeting is about.
Budgeting, in its simplest form, is tracking your spending more closely, ideally so you can put aside a small portion of your income in savings (10% is a good goal). This way, you can make sure you’re not spending more than you earn, and you can still go out to dinner with friends, or to the movies once a week without feeling guilty.
I’m not saving for anything big
We’ve heard this one a million times, especially from our younger customers. It’s true – without any specific savings goals on the horizon, it’s hard to muster the motivation to put that money into savings each month. In reality, though, we’re all saving for something big, even if we don’t know it yet.
Just because we won’t be rushing to put a deposit on a new home, or buy a new car tomorrow doesn’t mean you won’t need to make these purchase in the future.